Would like some feedback on my latest rental purchase

[Christopher McGuire]

I've been doing this for a few years now and feel like I know what I am doing, but I also know it's good to get feedback from other investors to keep myself in check. I guess I'm looking for validation that I am on the right path.

Anyway, here is my latest deal. Thoughts?

Purchase Price and closing costs - $30,000

Rehab -               $5,000

All in Price -         $35,000

Market rent is  $750 a month but I like to go below market to get it rented fast. So $725 for rent.

Gross Annual Revenue - $8,700

Effective Gross Revenue (10% vacancy)  - $7,830

Expenses

Mortgage 15 year at 5% (15% down) - $2,820 per year  ($235/month)

Taxes - $400 per year

Insurance - $500 per year

Capex 10%- $830 per year

Routine Maintenance 10% - $830 per year

Property Management 10% - $830 per year (although I do self manage)

Profit of $1,620 per year

Thanks for your time.

[Kirtley Whittington]

Christopher, your numbers look good imo. I have 30 rental units myself and I would buy based on your numbers in most (not all) areas in my market. Regardless of appreciation, your cash on cash return is good. While it is true that capex could significantly lower your returns, you should be fine since you included mgt fees and you self manage.

Did you pay the renovation costs out of pocket? What is your total cash contribution here?